JOGINDERPAL SINGH ARORA, MUMBAI V. ITO 2(2)(2), MUMBAI

ITA 6026/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79110 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 23-04-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D C JAIN
• Keywords: Cost of acquisition

Judgement Text

, , INCOME TAX APPELLATE TRIBUNAL MUMBAI - J BENCH MUMBAI , , / , BEFORE S/SH. VIJAY PAL RAO, JUDICIAL MEMB ER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 6026/MUM/2012, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR2003-04 JOGINDERPAL SINGH ARORA, C/O, D.C. JAIN & CO., 75 BOMBAY MUTUAL BUILDING, 293, DR. D.N. ROAD, FORT, MUMBAI-400001 VS. ITO 2(2)(2), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 PAN: ABDPA7550R ( #$ / APPELLANT) ( %&#$ / RESPONDENT) #$ ' / APPELLANT BY : SHRI D.C. JAIN %&#$ ( ' / RESPONDENT BY : SHRI MAURYA PRATAP ! ! ! ! ( (( ( )* )* )* )* / DATE OF HEARING :05-06-2014 +,' ( )* / DATE OF PRONOUNCEMENT : 05- 06- 2014 ! ! ! ! , 1961 ( (( ( 254 )1( )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) ! ! ! ! PER RAJENDRA,A.M: CHALLENGING THE ORDER DATED 13.08.2012 OF THE CIT(A )-5,MUMBAI,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: (1) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICE R LEVYING PENALTY OF RS. 1777975/- U/S. 271(1) (C) OF THE ACT. (2)THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, DELETE THE GROUND/S OF APPEAL AT OR BEFORE THE HEARING OF APPEAL. 2. ASSESSEE AN INDIVIDUAL,FILED HIS RETURN OF INCOME O N 30.09.2003 DECLARING TOTAL INCOME OF RS. 5.05 LAKHS.ASSESSING OFFICER (AO)FINALISED THE ASSE SSMENT U/S.143(3) OF THE ACT ON 27.03.2006 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 1.29 CRORES.MAJOR SOURCE OF INCOME OF THE ASSESSEE,DURING THE YEAR UNDER APPEAL,WAS LONG TERM CAPITAL GAIN(LTCG)ON SALE OF FLAT AT COLABA AT RS. 1.31 CRORES. HE DECLARED LTCG AT RS. 7.85 LAKHS IN THE RETURN OF INCOME.DURING THE ASSESSMENT PROCEEDINGS, HE FILED A FRESH WORKING OF LTCG WHEREIN LONG TERM CAPITAL LOSS (LTCL) OF RS. 76,,930/- WAS CLAIMED.AO FOUND THAT ASSESSEE HAD SOLD A FLAT AT C UFFE PARATE, COLABA AND HAD PURCHASED RESIDENTIAL FLATS AT PAWAI, THAT THE ASSESSEE HAD S HOWN INDEX COST OF ACQUISITION OF FLAT AT RS. 7.36 LAKHS,THAT HE HAD CLAIMED EXEMPTION U/S 54/54F AGAI NST THE LTCG ON THE SALE OF FLAT. HE DETERMINED THE INDEX COST OF ACQUISITION AT RS. 92. 14 LAKHS AND RESTRICTED THE ASSESSEES CLAIM OF EXEMPTION U/S 54/54F FOR THE INVESTMENT IN NEW PROP ERTY, AO INITIATED PENALTY U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS. 2.1. MEANWHILE,ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE TRIBUNAL (FAA) AGAINST THE 2 ITA NO. 6026/MUM/2012 JOGINDERPAL SINGH ARORA ORDER OF THE AO WHO GAVE PARTIAL RELIEF TO THE ASSE SSEE.AFTER CONSIDERING THE REPLY OF THE ASSESSEE, AO HELD THAT THE ASSESSEE HAD WRONGLY TOOK INDEXED COST OF THE FLAT AS ON 01.04.1981, THAT HE WAS MERELY OCCUPYING THE FLAT, AND DID NOT HAD OWNERSHI P RIGHTS OVER THE FLAT, THAT IT WAS A CASE WHERE THE ASSESSEE TOOK CHANCE AND SHOW INDEXATION COST A T RS. 21.63 LAKHS, THAT THE ACTUAL INDEXATION SHOULD HAVE BEEN SHOWN AT RS. 1.72 LAKHS INVOKING T HE PROVISIONS OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT, HE HELD THAT ASSESSEE HAD FUR NISHED AN EXPLANATION THAT WAS NOT SUBSTANTIATED BY IT. FINALLY, HE LEVIED A PENALTY OF RS. 17,77,97 5/- VIDE HIS ORDER DATED 29.03.2011. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE PENALTY ORDER, FAA HELD THAT ASSESSEE HAD SHOWN INDEXED COST ACQUISITION OF FLAT AT COLABA AT RS. 7.36 LAKHS, TH AT DURING THE ASSESSMENT PROCEEDING, HE SUBMITTED THAT PROPERTY AT COLABA WAS PURCHASED BEFORE 1981, THAT THE COST PRICE HAD TO BE TAKEN AT VALUE AS ON 01.04.1981 FOR THE PURPOSE OF INDEXATION, THAT R EQUEST WAS MADE BY HIM TO REPLACE THE INDEXED COST AT RS. 92.14 LAKHS AGAINST RS. 7.36 LAKHS, THA T ASSESSEE HAD MADE AN INADMISSIBLE CLAIM OF DEDUCTION, THAT CLAIM WAS CONTRARY TO PLAIN WORDS O F THE ACT, THAT HE HAD WRONGLY CLAIMED INDEXED COST, THAT AO WAS JUSTIFIED IN LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. 5. BEFORE US,AUTHORISED REPRESENTATIVE (AR) STATED THA T ASSESSEE HAD MADE CLAIM OF RS. 7.36 LAKHS ONLY IN THE RETURN OF INCOME, THAT INDEXATION CLAIM ED WAS REVISED DURING THE ASSESSMENT PROCEEDINGS ONLY, THAT THE CLAIM WAS IN FORM OF ONE OF THE ARGUMENTS, THAT ALL THE NECESSARY FACTS AVAILABLE WITH THE AO, THAT ASSESSEE HAD NOT CONCEA LED THE PARTICULARS OF INCOME OR HAD FURNISHED INACCURATE PARTICULARS. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT WHILE FILING THE RETURN OF INCOME,THE ASSESSEE HAD SHOWN THE INDEXED COST AT RS. 7.36 LAKHS, DURING THE ASSESSMENT PROCEEDINGS BEFORE THE AO, HE REVISED TH E CLAIM OF INDEXATION AND SAME WAS REJECTED BY THE AO. IN OUR OPINION, THE REVISION OF INDEXATI ON CLAIM WAS ONE OF THE ARGUMENTS TAKEN BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS.DURING T HE ASSESSMENT PROCEEDINGS, ASSESSEE CAN PLEAD VARIOUS THINGS.HE CAN MADE ALTERNATIVE CLAIMS .BUT SUCH ARGUMENTS, PLEADINGS, OR SUBMISSIO -NS, IN OUR OPINION CANNOT BE COMPARED WITH FILING OF INACCURATE PARTICULARS OR CONCEALING THE PARTICULARS OF INCOME.REJECTING THE ALTERNATE CLAIM /PLEADINGS OF THE ASSESSEE AND DISALLOWING SUCH CLAIMS COULD BE JUSTIFIED IN QUANTUM PROCEEDINGS.CO URTS ARE OF THE VIEW THAT DISALLOWANCE/ADDITI - ON OF ANY AMOUNT DURING THE ASSESSMENT PROCEEDING T HEY ARE CONFIRMED BY THE APPELLATE AUTHORITIES DO NOT JUSTIFY THE AUTOMATIC LEVY OF PE NALTY.PENALTY PROCEEDINGS ARE TOTALLY DIFFERENT FROM THE ASSESSMENT PROCEEDING THOUGH THEY ARE DIRE CTLY RELATED WITH THE ASSESSMENT.IN THE CASE UNDER CONSIDERATION,ASSESSEE HAD REQUESTED TO TAKE ON RECORD HIRE CLAIM OF INDEXATION. BUT IN THE BOOKS OF ACCOUNTS AND THE RETURN OF INCOME FILED BY THE ASSESSEE CLAIM INDEXATION WAS RESTRICTED TO RS. 7.36 LAKHS THAT WAS ACCEPTED BY THE AO. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE,WE ARE OF THE OPINION THAT ASSESSEE HAD NOT FURNISHED INACCURATE PARTICULARS OR HAD CON CEALED HIS INCOME,THEREFORE,REVERSING THE ORDER OF THE FAA,WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESULT, APPEAL FI LED BY THE ASSESSEE STANDS ALLOWED. /)0 !1) 2 3 ( - 4 ( ) 56 . 3 ITA NO. 6026/MUM/2012 JOGINDERPAL SINGH ARORA ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH ,JUNE,2014. . ( +,' 7 8! 5 TWU TWUTWU TWU , 2014 , ( - : SD/- SD/- ( / VIJAY PAL RAO ) ( / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 8! /DATE:05.06.2014 SK . . . . ( (( ( %) %) %) %) ; ') ; ') ; ') ; ') / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT (A) / < = , 4. THE CONCERNED CIT / < = 5. DR J BENCH, ITAT, MUMBAI / >- %)! , . . . 6. GUARD FILE/ - / &) &) &) &) %) %)%) %) //TRUE COPY// .! / BY ORDER, ? / 5 DY./ASST. REGISTRAR , /ITAT, MUMBAI